What Is Fractional Boat Ownership?

Fractional boat ownership is a type of partial ownership arrangement in which two or more parties determine to undertake both the benefits and responsibilities of sharing the ownership of some type of vessel. In many cases, the property owners involved will own equal portions of the boat purchased, and also share in the use and upkeep of the boat equally. At other times, this asset sharing arrangement may include multiple partners who own various percentages of ownership, and share in the benefits and responsibilities in accordance with those individual percentages.

Each fractional owner within a fractional boat ownership scheme works together in order to make use of the boat, as well as manage the expenses such as mooring costs, storage during months the boat is not slated for use, and any taxes and other costs that may be involved. This includes the financing that may be used to purchase the boat, the costs of cleaning and general maintenance, and any charges associated with boat licenses. Depending on the laws that prevail in the area where the boat is purchased, all individuals or entities involved in the fractional boat ownership may be held liable for taxes and other fees associated with the ownership.

Along with sharing responsibilities and obligations, fractional boat ownership also allows each owner the opportunity to make use of the boat from time to time. For example, if the boat in question is a yacht that is jointly owned by four different individuals, each owner will have access to the boat for a certain amount of time each calendar year. Typically, the owners can come together and set a schedule for usage that is agreeable to everyone concerned, as well as make plans on how to manage maintenance and other responsibilities.

One additional benefit of fractional boat ownership is the ability to actually use the asset to generate income. Once the owners have determined when they would like to have access to the boat, it is possible to engage the services of an outside agency to oversee the rental of the boat. This approach can often be used as a means of keeping the costs of ownership within reason, and may event create an income stream that can be used to pay off any mortgages on the asset. Once all outstanding debt related to the boat is settled, the owners can then divide any remaining income between themselves, based on the percentage of ownership held by each one.